401k Rollover -> What to invest?

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vss
Posts: 13
Joined: Sat Oct 20, 2018 4:40 pm

401k Rollover -> What to invest?

Post by vss » Tue Oct 30, 2018 11:51 pm

Hello:

I just rolled over my old 401K to a Rollover IRA with $80000. I'm 46 and would need help in my fund allocations. I was looking into the advanced 2nd grader portfolio with the following:

54% Total US Stock market index
27% Total international stock index
10% Total Bond index
6% Total REIT index
3% Precious metals fund

I picked ITOT (Total US Stock market index) instead of VTSMX or VTI as ITOT's expense ratio is the smallest. I see that the international exposure funds (VGTSX or VXUS) isn't doing good. Correct me if I'm wrong. I was looking into TRBCX and morningstar has rated it 5 stars. Any other alternative portfolio giving me a decent yearly return with low fee would be definitely helpful.

Btw, I'm also waiting on the core-4.com portfolio recommendations due Oct 31.

Alternatively, is it safe to invest in individual stocks in my Rollover IRA account rather than going with ETF/Mutual funds?

Please advise.

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: 401k Rollover -> What to invest?

Post by PFInterest » Wed Oct 31, 2018 6:24 am

vss wrote:
Tue Oct 30, 2018 11:51 pm
I just rolled over my old 401K to a Rollover IRA with $80000.
so you dont need backdoor rIRA?
vss wrote:
Tue Oct 30, 2018 11:51 pm
3% Precious metals fund
dont need, unnecessary, and also at 3% why bother?
vss wrote:
Tue Oct 30, 2018 11:51 pm
I see that the international exposure funds (VGTSX or VXUS) isn't doing good
yes. have you seen the news?
vss wrote:
Tue Oct 30, 2018 11:51 pm
morningstar has rated it 5 stars.
you should search through this site about the M* stars. basically useless.
vss wrote:
Tue Oct 30, 2018 11:51 pm
is it safe to invest in individual stocks
no.

you are new, please go read through the wiki, search this site for topics you might find interesting.
lots to learn.

JW-Retired
Posts: 6998
Joined: Sun Dec 16, 2007 12:25 pm

Re: 401k Rollover -> What to invest?

Post by JW-Retired » Wed Oct 31, 2018 8:21 am

PFInterest wrote:
Wed Oct 31, 2018 6:24 am
vss wrote:
Tue Oct 30, 2018 11:51 pm
I just rolled over my old 401K to a Rollover IRA with $80000.
so you don't need backdoor rIRA?
Yeah, this is the big semi-secret downside to rolling to a tIRA. If the OP is single then it only takes $135k in gross income to be banned from making any Roth contributions directly.
JW
Retired at Last

User avatar
ruralavalon
Posts: 14257
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: 401k Rollover -> What to invest?

Post by ruralavalon » Wed Oct 31, 2018 11:09 am

vss wrote:
Tue Oct 30, 2018 11:51 pm
Hello:

I just rolled over my old 401K to a Rollover IRA with $80000. I'm 46 and would need help in my fund allocations. I was looking into the advanced 2nd grader portfolio with the following:

54% Total US Stock market index
27% Total international stock index
10% Total Bond index
6% Total REIT index
3% Precious metals fund
At age 46 a 10% bond allocation is very small in my opinion. At age 46 I suggest about 30% in bonds. This is expected to substantially reduce portfolio volatility (risk), with only a relatively modest decrease in portfolio return. Graph, "An Efficient Frontier: the power of diversification". Please see the wiki articles Bogleheads® investment philosophy, part 3 "Never bear too much or too little risk", and "Asset allocation".

Asset allocation is a very personal decision. You must decide on an allocation which is comfortable for you based on your own ability, willingness and need to take risk.

3% in anything is too small to make a real difference.

vss wrote:
Tue Oct 30, 2018 11:51 pm
I picked ITOT (Total US Stock market index) instead of VTSMX or VTI as ITOT's expense ratio is the smallest. I see that the international exposure funds (VGTSX or VXUS) isn't doing good. Correct me if I'm wrong. I was looking into TRBCX and morningstar has rated it 5 stars.

Short-term past performance is not a good predictor of future performance. Wiki article, "Callan periodic table of investment returns". That table shows annual returns for nine fund types ranked best to worst over the years 1999-2018 (20 years). There is no pattern, it is random.

Don't omit international stocks just because recent past performance has been poor.

Stars record past performance, and are not strong predictors of future performance.


vss wrote:
Tue Oct 30, 2018 11:51 pm
Any other alternative portfolio giving me a decent yearly return with low fee would be definitely helpful.
In selecting funds strive for a combination of broad diversification (to reduce risk) and low expense ratios (to increase your net gain). To simply and easily achieve those two goals I suggest choosing funds to simulate the very well diversified, low expense ratio "three-fund portfolio". Wiki article "Three-fund portfolio". Forum discussion, "The Three-Fund Portfolio".

There are many other simple portfolio ideas, see the wiki article "Lazy portfolios".

vss wrote:
Tue Oct 30, 2018 11:51 pm
Btw, I'm also waiting on the core-4.com portfolio recommendations due Oct 31.

Alternatively, is it safe to invest in individual stocks in my Rollover IRA account rather than going with ETF/Mutual funds?

Please advise.
For better diversification stick with traditional mutually funds or ETFs, rather than individual stocks.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

vss
Posts: 13
Joined: Sat Oct 20, 2018 4:40 pm

Re: 401k Rollover -> What to invest?

Post by vss » Thu Nov 01, 2018 11:28 pm

I posted my picks based on my readings @ core-4.com and here it is:

ITOT (48%)
VXUS (24%)
PSCH (20%)
FAHDX (8%)

Now that Apple's guidance looks bleak, is ITOT or any Tech ETF / Mutual fund a good pick?

Please advise.

User avatar
ruralavalon
Posts: 14257
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: 401k Rollover -> What to invest?

Post by ruralavalon » Fri Nov 02, 2018 10:27 am

vss wrote:
Thu Nov 01, 2018 11:28 pm
I posted my picks based on my readings @ core-4.com and here it is:

ITOT (48%)
VXUS (24%)
PSCH (20%)
FAHDX (8%)

Now that Apple's guidance looks bleak, is ITOT or any Tech ETF / Mutual fund a good pick?

Please advise.
Please do not use ticker symbols by themselves.

No one has all those symbols memorized, so anyone wanting to help you has to look up what you are talking about.

iShares Core S&P Total U.S. Stock Market ETF (ITOT) ER 0.03% is still very diversified with a very low expense ratio, and is still a very good pick.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

PFInterest
Posts: 2684
Joined: Sun Jan 08, 2017 12:25 pm

Re: 401k Rollover -> What to invest?

Post by PFInterest » Fri Nov 02, 2018 1:06 pm

vss wrote:
Thu Nov 01, 2018 11:28 pm
Now that Apple's guidance looks bleak, is ITOT or any Tech ETF / Mutual fund a good pick?

Please advise.
yes. no. maybe.

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